Coca-Cola keeps Italian orange suppliers after protests

ROME, March 6 (Reuters) - Coca-Cola gave in to pressure from Italian orange producers and said on Tuesday it would continue buying from local suppliers to produce its Fanta soda in spite of a report denouncing the tough work conditions of immigrant fruit pickers.

The move by the U.S. soft-drink giant came after a report in British magazine The Ecologist last month shone a light on the situation of immigrant workers in the southern Calabria town of Rosarno, the scene of racial clashes two years ago.

“It wasn’t our initial intention, but considering the emotional situation we’re in ... we have decided to keep our local supplier,” said Salvatore Gabola, director of European public affairs at Coca-Cola Co, told reporters in Rome.

The soda maker, which says it uses only Italian oranges for the local version of its fizzy Fanta beverage, had infuriated local farmers and trade unions by announcing after The Ecologist’s report that it would stop buying concentrated orange juice produced near Rosarno.

The Coca-Cola executive denied the company’s initial decision to stop a number of contracts with local suppliers had anything to do with the British report, but said Coca-Cola remained “preoccupied by the life conditions of immigrants.”

After a meeting in Rome with Agriculture Minister Mario Catania, Gabola said multi-year contracts with Calabrian and Sicilian producers would be signed in the coming years to “increase the quality and competitiveness” of the industry.

Asked by reporters whether the soft-drink maker had demanded anything in return, the agriculture minister said the government had not offered any “direct or indirect” compensation to Coca-Cola to sweeten the deal.

Some 8,000 illegal immigrants work in the southern Calabria region, which was the scene of the worst episode of racial unrest in Italy in years in early 2010. Most come from Africa and work as day labourers picking fruit and vegetables.

Many of them live in abandoned factories with no running water or electricity and human rights groups say they are exploited by organised crime.

Competition from other global producers of oranges such as Mexico, Brazil or the United States is also pressuring local farmers, keeping local wages as low as 25 euros ($33) a day, Alberto Callello, a local farmer, told The Ecologist.

“I get 7 cents per kilo for industrial oranges (used for concentrates) but need 8 cents per kilo to pay workers, so there is a paradox,” he said, according to the magazine. “At the end of the chain is a clash with poor people.”

Coca-Cola’s Gabola declined to give an estimate of the price the new work contracts will offer suppliers, but said the group’s decision should not lead to “higher prices but more productivity.”

Some 12 percent of Coca-Cola’s Fanta soda is made of concentrated orange juice, the company says on its website, a higher percentage than in the rest of Europe.

Italy was the world’s 8th largest producer of oranges in 2010, according to the Food and Agriculture Organisation, with 2.4 million tonnes. Calabria produces about a quarter of the output, with half of its oranges used for juices and soft drinks, according to the agriculture minister.